Anyone who has followed patent laws and the intellectual property system is undoubtedly aware that they have combined to create major headaches for the content and software industries, leading to widespread calls for reform. But the problems affect other industries, and a new report by a group that has studied the role of IP in the biotech industry reveals that many of the same issues (along with a few unique ones) are causing problems in that field as well. The report provides a series of recommendations, many of which could just as easily have arisen from a study of a different industry.

Although weighing in at just over 40 pages, the report was seven years in the making. It was prepared by a panel organized by the Centre for Intellectual Property Policy at Montreal's McGill University’s Faculty of Law. In addition to the 15 members of the panel proper, over 50 individuals are credited with research and other input, suggesting that the examination of the biotech industry was fairly comprehensive.

For all that research, the panel found that hard information on the impact of the IP system is sorely lacking; they were unable to even determine if changes to patent law correlated with changes in money spent on R&D. As such, one of their recommendations is that patent authorities actually try to track the impact of changes in IP policy so that there can be a evidential basis for future analysis. In the absence of such data, it concludes that some of the more extreme claims—that strong IP protections are either essential for innovation or have prevented AIDS treatments from reaching the developing world—simply have no rational support.

IP as an end unto itself, not to foster innovation

What the panel does conclude is that most people have lost track about what IP is supposed to be all about. Innovations and new developments—especially those under the biotech umbrella such as medicine, agriculture, and energy—foster the greater public good. As such, IP and patent laws were, at least initially, intended to foster that innovation. Now, interested parties frequently present IP as an end unto itself. "People put IP on a pedestal," the report reads, "saying it is the reason why companies invest in innovation or the reason that people do not get needed drugs—rather than seeing it for what it is: a cog in a large system of innovation."

According to the authors, this IP model is dead as far as the biotechnology industry is concerned, although it "has not yet fully left the stage." They date its demise to a famous legal case, in which pharmaceutical companies sued after the government of South Africa imported unlicensed AIDS medication. The backlash was widespread and caused the reevaluation of the patent system by many countries and organizations; all that, and the companies ultimately dropped the suit.

If the old model is dying, the authors see a valuable use for it: identifying its failures in order to reform the system. These failures pervade almost every level, and have contributed to a complete lack of trust among the major players. Industry, as noted, views IP as its own end and fiercely protects it. "But such thinking has proved counterproductive to industry," the report states, "which in health fields has seen declining levels of innovation despite increasing stakes in intellectual property."

Patent laws as a barrier to research

That happens, in part, because IP barriers tend to prevent further research on the topic by the publicly-funded research community. That community tends to reside at universities that are making the problem worse by licensing developments at their institutions to industry without any conditions regarding their future use. Despite these licensing agreements, the authors cite a study that determined universities as a whole have lost money when pursuing the licensing of IP.

Governments of developed nations take a hit for their efforts to force their own IP system on developing economies, where the model may not work, and for doing so despite lack of any clear data on whether their own system is working. The governments of developing economies get taken to task for a sometimes mindlessly antagonistic approach to IP; a study presented in concert with the release of this report describes how a Brazilian program meant to protect indigenous knowledge of medicinal plants provided a mechanism for suing pharma companies, but none for negotiating development agreements with them.

Even the press get criticized for their failure to accurately present all of the fallout from these problems to the public.

The report's recommendations include a number that are designed simply to reestablish some measure of trust among these interested parties. Beyond that, it sees the future of biotech IP as residing in public-private partnerships. These include university-managed licensing agreements and research partnerships that emphasize the ability of biologists to engage in open research, even on licensed materials. They also highlight the role of NGOs such as the Gates Foundation, which has helped fund patent licensing pools that will provide the benefits of new medicines to the developing world.

Both governments and universities are called on to foster research centers in developing nations through these partnerships. This will not only give these nations a vested interest in IP, but it will help provide both academics and industry with access to the source of indigenous medicines and populations in which to pursue relevant clinical trials. This effort is already something the scientific community is engaged in.

Overall, some of the recommendations seem to be idealistic, and it's not clear how well these public-private partnerships can scale and expand. Nevertheless, the report is valuable reading for anyone interested in IP in general, as many of its salient points apply to fields beyond biotech.

Further reading:

The report is being made available through a Creative Commons License via The Innovation Partnership.